Recent
Changes
in
Execucomp:
Objective
•
Learn
about
New
ExecuComp content
and
structure
due
to
the
new
FASB123
reporting
requirements.
– The changes affect companies with fiscal year end after Dec 2005.
Hence, for year 2006 not all companies have already reported in the
On
ExecuComp
• Universe: 2,872 companies both active or inactive. S&P 1500 plus companies removed from the index but still trading.
• Data is collected from each company annual proxy DEF14A, which must be
filed 120 days after the company’s fiscal year end.
• How many executives?
Up to 9, though most companies only report 5.
• How are they identified?
EXECID is permanent id for each executive through out her career. CO_PER_ROL identifies executive/company combination.
• Data on executives:
– Individual characteristics: title, age, gender, date became/left as CEO.
– Compensation: Salary, Bonus, Restricted Stock Awards, Option Awards, Non‐
Equity Incentive Plan, Deferred Compensation, Pension Plan. – Shares Owned.
New
Reporting
Requirements
FAS
123
• FAS 123 (R) :
Equity based compensation has to be expensed and be reflected in the financial
statements based on fair value of the awards.
Companies with fiscal year end after Dec 2005 have to adjust to new rules.
All data available in the past continues to be available; NO info has been purged.
• DEF14A (SEC doc) is organized in 6 new tables:
1. Summary Compensation: discloses salary, bonus, stock awards, option awards, change
in pension value other compensation. Option exercises and Stock vested.
2. Plan Based Table: contains details on option awards, restricted stock awards, and
estimated payouts for equity and non‐equity incentive plans.
3. Outstanding awards Table: information on unexercised options, stock that has not
vested and equity incentive plan awards outstanding.
4. Deferred Compensation Table: reports the executive or company contributions,
earnings and withdrawals and account balances for the deferral programs.
5. Pension Benefits Table: information regarding each plan of the company that provides
payments in connection with retirement.
6. Directors compensation Table: fees, stock and options awards, non‐equity incentive
ExecuComp Structure
for
2006
fiscal
year
• For year 2006, Execucomp data is delivered in 6 main tables, mapping the
“original” tables in the SEC doc.
1. AnnComp: summary compensation data + other.
2. PlanBasedAwards: Contains data on awarded options and stock grants
during the filled fiscal year.
3. OutstandingAwards: Describes the outstanding stock options and unvested
stock awards held by officers as of the end of fiscal year.
4. DeferredComp: contains deferred compensation.
5. Pension: contains all details on pension benefits.
6. DirectorComp: contains new details on the director compensation.
• Prior to 2006, the reporting of stock option grants and long incentive
plans are in the following two tables – the data goes up to 2005.
1. Stgrttab: Stock Options Grants.
ExecuComp in
WRDS
•
The
web
‐
query
now
presents
the
data
in
several
queries:
Aggregate compensation items: salary, bonus, total options…
Disaggregate compensation items:
– Individual options and preferred stock granted and outstanding.
– Individual deferred plans.
– Individual pension plans.
– Directors compensation.
•
Datasets
in
WRDS
Unix:
/wrds/comp/sasdata/execcomp/
All sets provided by Compustat are available, plus the aggregate file
Two
Main
Questions
1. How are the main aggregated compensation items affected?
2. Stock‐based compensation: how to identify a unique row. Difference
between the aggregated and disaggregated data for restricted stock
1.
Old
Compensation
Items
•
Pre
FAS
123:
The variables TDC1 & TDC2 were the two most
encompassing compensation measures. There is continuity with these
measures but the definition has changed slightly.
– Using the 1992 format: TDC1= Salary +Bonus+ Other Annual + Total Value Restricted Stock granted + Total Value Stock Options granted +
Long‐Term Incentive Payouts + All Other Total
– Using the 2006 format: TDC1= Salary + Bonus + Non‐Equity Incentive
Plan Compensation + Grant‐Date Fair Value Stock Awards + Grant‐
date fair Value of Option Awards + Deferred Compensation + Other
1.
New
Compensation
Items:
FAS
123(R)
• New compensation items are reported by companies. Hence only
available from 2006 onwards.
– TOTAL_SEC, Total Compensation as Reported to SEC: Salary, Bonus, Stock
Awards, Option Awards, Non Equity Incentives, Pension and Deferred
Compensation Changes, Other Comp.
¾ Cost recorded by the company on its income statement.
– Total_ALT1: same definition as TOTAL_SEC except that stock & options are valued using grant‐date fair value .
¾ Compensation as of grant date.
– Total_ALT2: same definition as TOTAL_SEC except that stock & options are
valued using stock vesting (SHRS_VEST_VAL) and value realized from option
exercise (OPT_EXER_VAL).
2.
Stock
‐
based
Compensation
Items
Firms may grant options and restricted stock several times a year. Hence,
this type of compensation is delivered at an aggregated or disaggregated
level.
• Aggregated variables: 1 record per (firm, co_per_rol, year)
• Disaggregated variables: produce several records for (firm, co_per_rol,
year). Need to add ID variable.
¾ Before FAS 123: GRNTNUM allows to identify each option grant.
¾ FAS 123 : Plan Based Awards table contains all disaggregated data.
GRNTNUM applies to all types of awards reported in the table: i.e.
shares , equity and non‐equity incentive plan awards and options.
2.
Stock
‐
based
Compensation:
Options
• Stock options awarded during the fiscal year
¾ OPTION_AWARDS_BLK_VALUE (before FAS 123)
¾ OPTION_AWARDS_FV (FAS 123, i.e. data from 2006 onwards) At company level?
Companies do not report all stock options awarded to all employees. From the DEF14A filling can only be computed for executives.
• Options exercised during the fiscal year:
– OPT_EXER_NUM & OPT_EXER_VAL
• Options outstanding:
– OPT_UNEX_EXER_EST_VAL: Estimated value of in the money
unexercised vested options. (OPT_UNEX_EXER_NUM)
– OPT_UNEX_UNEXER_EST_VAL : Estimated value of in the money
Aggregated
and
Individual
Options
Data
– Before
FAS
123
Data from 1992‐2005 plus few companies still reporting old format for 2006 fiscal
year.
Available via Web‐query. All data items in Execcomp.
CO_PER_R OL SALARY OPTION_AWA RDS_NUM OPTION_AWA RDS_BLK_VAL UE OPTION_AW ARDS_RPT_ VALUE GRNTN UM NUMSECU
R BLKSHVAL EXEC_LNAME YEAR 28409 375 106.251 293.073 66.227 1 66.667 157.584 Jaworski 2006 28409 375 106.251 293.073 66.227 2 39.584 135.489 Jaworski 2006 30178 365.28 173.334 401.205 291.137 1 73.334 164.831 Whiting 2006 30178 365.28 173.334 401.205 291.137 2 100 236.374 Whiting 2006 32109 265.035 56.25 130.28 94.413 1 40 85.078 Deranleau 2006 32109 265.035 56.25 130.28 94.413 2 12.25 32.618 Deranleau 2006 32109 265.035 56.25 130.28 94.413 3 4 12.584 Deranleau 2006 32110 263.333 510.417 1217.435 1036.274 1 160.417 360.566 Grewal 2006 32110 263.333 510.417 1217.435 1036.274 2 350 856.869 Grewal 2006
Aggregated Options data Individual Option data
OPTION_AWARDS_NUM: Total number of stock options awarded during the year, as detailed in Plan Based awards. OPTION_AWARDS_BLK_VALUE: Aggregate value of stock options granted during the year –valued using S&P Black‐Scholes Methodology. Applies to 1992 reporting format only. (OPTION_AWARDS_FV for FASB123 reporting)
OPTION_AWARDS_RPT_VALUE: Aggregate value for all options granted during fiscal year as valued by company. Applies to 1992
reporting forma t only.
GNTNUM: Grant Number Identifier (Stgrttab).
NUMSECUR: Number of securities in the option grant. Applies to 1992 only. (Stgrttab).
BLKSHVAL: Value of the option grant using the S&P modified Black‐Scholes Method. Applies to 1992 reporting format only
Aggregated
and
Individual
Options
Data
– FAS
123
Data for 2006 fiscal year only. Aggregated data available through Web‐query.
Individual option data in Planbasedawards dataset.
Date Approved by Compensation
Committee
Estimated Future Payouts Under Equity Incentive Plan Awards (a)
Al l Other Option Awards: Number of Securiti es Underlying Options (#) Exercise or Base Pri ce of Option Awards ($/SH) (b) Closing Market Price on Grant Date Grant Date Fai r Value of Stock and Opti on Awards Name Grant Date Target (#) Maximum (#) H. McGraw III 4/3/06 12/07/ 05 25,140 50, 280 $ 2,906,687 4/3/06 12/07/ 05 196,058 $ 57.81 $ 57.51 $ 2,950,673 3/23/06 04/24/ 02 277,637 (c) $ 56.43 $ 56.64 $ 3,555,001 3/23/06 04/28/ 04 167,004 (c) $ 56.43 $ 56.64 $ 2,138,402 R. J. Bahash 4/3/06 12/07/ 05 12,233 24, 466 $ 1,414,379 4/3/06 12/07/ 05 46,990 $ 57.81 $ 57.51 $ 707,200 D. Sharma 4/3/06 12/07/ 05 7,551 15, 102 $ 873,047 4/3/06 12/07/ 05 29,003 $ 57.81 $ 57.51 $ 436,495 3/16/06 12/04/ 02 31,771 (c) $ 58.83 $ 59.05 $ 423,225 D. L. Murphy 4/3/06 12/07/ 05 7,551 15, 102 $ 873,047 4/3/06 12/07/ 05 29,003 $ 57.81 $ 57.51 $ 436,495 3/14/06 04/30/ 03 17,799 (c) $ 55.84 $ 56.42 $ 225,857 K. M. Vittor 4/3/06 12/07/ 05 6,872 13, 744 $ 794,541 4/3/06 12/07/ 05 26,395 $ 57.81 $ 57.51 $ 397,245 B. D. Marcus 4/3/06 12/07/ 05 3,460 6, 920 $ 400,045 4/3/06 12/07/ 05 13,289 $ 57.81 $ 57.51 $ 199,999
GRNT_NUM: Identifies entry in table. Hence it can refer to any Equity and non‐equity plan! No longer count for
number of options grants.
When OPTS_GRT > 0, then entry corresponds to option grant.
OPTS_GRT: Number of stock options granted
Fair_Value: Grant date Fair value of stock and option Awards.
SUM(OPTS_GRT)= OPTIONS_AWARDS_NUM Total number of stock options awarded during the year.
SUM(FAIR_VALUE)= OPTIONS_AWARDS_FV Aggregate value of stock options granted during the year.
Details on individual options granted are reported in Plan Based Awards table.
2.
Stock
Based
Compensation:
Restricted
Stock
• Restricted Stock awarded during the fiscal year
¾ RSTKGRNT (before FAS 123, only applies for 1992 format)
¾ STOCK_AWARDS_FV (FAS 123, i.e. data from 2006 onwards)
• Stock vested during the fiscal year:
– SHRS_VEST_NUM & SHRS_VEST_VAL
• Restricted Stock Outstanding :
– STOCK_UNVEST_VAL : Aggregate market value of restricted shares
held by executive (STOCK_UNVEST_NUM)
